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Overnight Markets: Yellen’s dovish remarks lift US stocks
The S&P 500 posted a 2016 high, paced by gains in technology, healthcare and consumer shares.
US stocks posted solid gains on Tuesday, with the Standard & Poor’s 500 Index scaling a 2016 high, as Federal Reserve Chair Janet Yellen signalled the central bank will be cautious on further interest-rate increases amid heightened global risks.
The Dow Jones Industrial Average added 98 points, or 0.56%, to 17,633. The S&P 500 gained 18 points, or 0.88%, to 2,055. The Nasdaq Composite Index jumped 80 points, or 1.67%, to 4,847.
In a speech to the Economic Club of New York, Yellen said it is appropriate for US central bankers to “proceed cautiously” in raising rates because the global economy presents heightened risks.
On the economic front, the Conference Board Consumer Confidence Index came in at 96.2 in March, up from 94.0 in February.
Equities climbed even as crude retreated for a fourth day, paced by gains in technology, healthcare and consumer shares.
Apple climbed 2.4% to the highest since 29 December after the US government dropped its case to gain access to a terrorist’s iPhone. Facebook Inc. increased 2.2% to a record.
Drugmakers contributed the most to the rally in healthcare, with Bristol-Myers Squibb Co. gaining 2.3% and AbbVie Inc. adding 1.7%.
A group of retailers also rose after the stronger confidence data. Netflix Inc. and Amazon.com Inc. climbed more than 2.4%. Priceline Group Inc. added 1.6%.
Commodity shares reversed declines as the dollar tumbled on Yellen’s comments, lifting energy and raw-material producers despite a 2.8% drop in crude oil. Southwestern Energy Co. and Williams Cos. gained more than 3.7%. Newmont Mining Corp. surged 4.9%, and Freeport-McMoRan Inc. wiped out a 7.2% drop.
In the banking sector, Bank of America Corp. fell 1.5% after losing as much as 2.6%. Wells Fargo & Co. declined 1.3%, extending a losing streak to five days.
In Asia, most stocks advanced on Wednesday after remarks from Yellen assuaged concerns about a near-term interest rate increase, but Japan's shares retreated as the yen strengthened.
Japan's Nikkei 225 retraced some of early losses to trade off by 0.27%. Across the Korean Strait, the Kospi was up 0.62%. Hong Kong's Hang Seng index was higher by 1.39%.
Chinese markets were higher, with the Shanghai composite adding 1.8% and the Shenzhen composite up 1.79%. Australia's ASX 200 was up 0.33%.
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by Gavin Lumsden on Aug 30, 2016 at 00:01